Mexico Bus Company Hits Skids

S&P has cut Mexico-based Grupo Senda to B from B+ and maintains a negative outlook. “The downgrade reflects Senda’s weaker-than-expected financial results during fourth-quarter 2008 and our expectation that operating margins during 2009 will remain under pressure,” says S&P analyst Enrique Gomez Tagle. Senda’s financial metrics have deteriorated, further aggravated by recent MXP depreciation, as most of the company’s debt is denominated in US dollars, S&P adds. “The negative outlook reflects the uncertainty regarding the evolution of the bus transportation sector and the effect this could have on Senda’s profitability and liquidity,” it adds. A downgrade is likely if margins do not improve during the first half of 2009. The firm’s 10.5% of 2015, of which there is $150m outstanding, was bid at 60 last week (22.39% YTW), according to Credit Suisse.